Republican hopes pinned to health care

SCOTT JAGOW: The most important domestic issue for Americans right now is pretty clearly affordable health care. In the latest New York Times/CBS poll, people ranked health care way ahead of immigration or taxes or anything else. And a majority of Americans said the U.S. government should guarantee health insurance for everybody. Commentator David Frum believes Republicans better come up with a plan if they have any inkling of winning in 2008.

DAVID FRUM: No wonder Americans are dissatisfied. The average cost of health insurance for a family of four has almost doubled over the past six years.

Those price increases have gobbled up workers' pay raises and millions of working Americans find themselves priced out of the health care market.

Democrats and liberals have an answer to the problem: a bigger role for government.

But for market principles to work, markets must begin to deliver better results.

One reason the U.S. health care market doesn't work well is that the U.S. doesn't have a national market for health insurance. Instead, we've got 50 different state markets, each with its own rules and regulations. Health coverage in New Jersey can cost more than twice as much as health coverage in Kentucky.

Then we make things even more confused, with massive tax breaks for those workers who buy their health insurance through their employers.

These subsidies distort the American job market. They dull consumer sensitivity to price increases. And they reduce health care providers' incentives to innovate, economize and compete.

To restore rationality to the marketplace — and avert a government takeover — Republicans need to do two things:

First, create a true national insurance marketplace. Let New Jerseyans buy Kentucky policies if they want, and vice versa.

Second, break the link between work and insurance by finding ways to put the tax subsidy for health care directly into the hands of every citizen.

That's what Republican Governor Mitt Romney did in Massachusetts. And it is what President Bush proposed in his 2007 State of the Union address.

Successful political parties listen to voters and then invent solutions consistent with their party principles. On health care, it's time for Republicans to start succeeding.